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Whereas in July Resolution had agreed to back Friends
Provident's offer, by October it had subsequently recommended an
offer by Standard Life, as a result of the additional value potential
for its shareholders and this was to be placed before Resolution’s
shareholders for approval. Standard Life would pay approximately
£49m compensation to Friends Provident.

However, Pearl Group, which initially had a 16.5% stake in
Resolution and was its largest shareholder had increased its stake
and made a second, and improved 691p a share offer on 19
October but was immediately rejected. At this point The Takeover
Panel stepped in and instructed that Standard Life had until 5pm
on Thursday, 25th to state whether it intended to bid for
Resolution, or walk away. This was subsequently extended by one
day.

On the due day of Friday 26 October, Standard Life both won and
then lost the battle for Resolution. Standard Life won Resolution’s
support with an offer of 517p in cash and 0.715 new Standard Life
shares for each Resolution share. That offer valued each
Resolution share at 715p based on Standard Life’s closing price of
276.25p on Thursday 25 October. Standard Life’s shares fell after
the deal was announced on concerns about the strategic sense of
the move and over the planned share issue which would dilute
earnings. But the shares bounced back after Pearl raised its bid
on speculation that Standard Life’s bid would fail. Its offer stood at
715p per Resolution share (based on Thursday night closing share
prices) and was recommended by Resolution's directors.

Pearl, however, increased its stake in Resolution to 24.18% on
Friday, 26 October which to all intents was a blocking vote (75% of
shareholders required for approval (see appendix 4) ) and within
an hour of the Resolution/Standard Life deal being announced,
tabled a counter 720p a share all cash £4.94bn offer. Moreover, it
launched an attack on Standard Life’s strategy. The Resolution
board had little time to consider the proposal ahead of the
Takeover Panel deadline for tabling a bid. Consequently, the
Resolution board withdrew its recommendation of support for the
Standard Life bid.

“In light of the fact that Pearl now holds approximately
24% of Resolution's issued share capital, Resolution
does not believe that the offer from the Standard